Mufti Baha-Ud-Din Farooqi, J.
1. M/s. Jammu Iron and Steel Syndicate, Jammu, is a partnership-firm engaged in the business of purchase and sale of iron and steel sheets including galvanised iron sheets. For the accounting period from 1st April, 1963, to 31st December, 1963, the assessing authority assessed the firm to tax at the rate of 7 per cent on the sales of galvanised iron sheets, presumably, treating them as 'iron goods' under entry 40 of Notification SRO No. 138 dated 28th March, 1963, and also imposed a penalty of Rs. 500. In revision, the Commissioner, Sales Tax, held that the sales tax was leviable at 2 per cent for the period from 1st April, 1963, to 1st August, 1963, and at 7 per cent for the remaining period. He made an order accordingly. Aggrieved by the order, the firm filed a writ petition in this Court. The writ petition came up for hearing before a learned single Judge of this Court: By his order dated 10th April, 1970, the learned single Judge remanded the case observing as under:
The learned Commissioner seems to have been quite right in having assessed the tax at 2 per cent for the period from 1st April, 1963, to 21st August, 1963, but as he has not applied the same yardstick for the remaining period of the same year, I think the proper course would be that respondent No. 1 should consider the matter afresh. I would, therefore, direct that the case be remanded to the Commissioner for his disposal according to law.
2. Acting upon this direction, the Sales Tax Commissioner reconsidered the matter and, by his order dated 28th May, 1975, again held that the tax was leviable at 7 per cent for the period from 27th August, 1963, to 31st December, 1963. Aggrieved by the order, the firm has filed a writ petition, being Writ Petition No. 18 of 1976, and has challenged the order. In the meantime, the State too has filed an appeal, being L.P.A. No. 24 of 1970, challenging the order of the learned single Judge. The appeal and the writ petition were heard together and will be disposed of by this common judgment.
3. Learned counsel appearing for the firm contended that G.I. sheets fall within the ambit of entry 48 of Notification SRO No. 138 dated 28th March, 1963, and are liable to sales tax at 2 per cent ad valorem. In support of his argument, he relied on the decisions in State of Andhra Pradesh v. Sri Durga Hardware Stores 1973 Tax. L.R. 2317 and Commissioner of Sales Tax v. Tata Iron and Steel Co. Ltd. 1975 U.P.T.C. 104
4. Entry 48 in SRO No. 138 reads thus:
48. Iron and steel, that is to say,-(a) pig iron, and iron scrap;(b) iron plates sold in the same form in which they are directly producedby the rolling mill;(c) steel scrap, steel ingots, steel billets, steel bars and rods;(d) (i) steel plates |(ii) steel sheets | sold in the same form in which they(iii) steel bars and tin bars | are directly produced by the(iv) rolled steel sections | rolling mill.(v) tool alloy steel |
5. To the same effect is entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act (Act No. 6 of 1957). This entry fell for consideration by a Division Bench of the Andhra Pradesh High Court in the case of Sri Durga Hardware Stores 1973 Tax. L.R. 2317. Their Lordships observed:
Entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act begins with the words 'iron and steel, that is to say....' Those words are of considerable importance. They are explanatory of what iron and steel is. All articles enumerated under that head, either in their crude form or in their manufactured stage or in any of the forms listed under the sub-headings (a), (b), (c) and (d), are treated as various forms of iron and steel.
The scope and meaning of the words 'that is to say' following 'land' in entry No. 21 of List II of the Seventh Schedule to the Government of India Act, 1935, had been expressed by the Judicial Committee in Megh Raj v. Allah Rakhia A.I.R. 1947 P.C. 72 as introducing the most general concept 'rights in or over land'.
By a parity of reasoning, the words 'that is to say' occurring immediately after 'iron and steel' in entry No. 2 show that the legislature intended to adopt the most general concept of iron and steel and wanted all forms of iron and steel to be brought within that entry.,
6. and again as under:
Galvanisation is nothing but coating the iron sheet with zinc by an electrical process, or some other processes, to prevent it from oxidation. The galvanisation improves the utility of the raw material of iron. Corrugation is merely wrinkling of the sheets in one direction for the purpose of making the sheets more rigid and for giving increased stiffness so as to be more suitable for roofing and walling. Corrugation results merely in the alteration of the shape of the raw material, 'iron and steel'. Both corrugation and galvanisation improve the utility of the raw material. By the process of galvanisation and corrugation, the iron and steel do not lose their essential character as 'iron and steel' when the resulting articles are sold as galvanised plain or corrugated sheets. The purposes for which the iron is used may be different from the purposes for which the galvanised plain or corrugated sheets are used, but for that mere reason it is difficult to hold that the essential character of iron has been lost. Nor is the fact that the raw material and the articles resulting on processing that are sold under different and distinct names in the commercial market, would be decisive of the fact that the galvanised plain or corrugated sheets are different from iron, the raw material which still exists in them. 'B.P. sheets are mere sheets of steel and hence a fortiori they are forms of 'iron and steel'.
7. In conclusion, their Lordships held that galvanised plain or corrugated sheets and B.P. sheets fall within entry No. 2 in the Third Schedule to the Andhra Pradesh General Sales Tax Act. This decision was followed by the Allahabad High Court in the case of Tata Iron and Steel Co. Ltd. 1975 U.P.T.C. 104 and it was held that galvanisation and corrugation do not change the essential character of the iron sheets; they still remain iron sheets. We are in respectful agreement with the view expressed in these decisions and hold that the galvanised iron sheets are merely forms of iron and not iron goods and fall within the ambit of entry 48 of SRO No. 138 dated 28th March, 1963. In this view, the sales tax leviable from the firm on the sales of galvanised iron sheets from 1st April, 1963, to 31st December, 1963, was at 2 per cent only. The view to the contrary expressed by the Commissioner of Sales Tax is erroneous and must be set aside.
8. The result, therefore, is that the appeal fails and is hereby dismissed. The writ petition succeeds and is allowed. The order of the Sales Tax Commissioner dated 28th May, 1975, is set aside and it is directed that the firm shall be assessed to tax on the sales of G.I. sheets at 2 per cent for the entire accounting period from 1st April, 1963, to 31st December, 1963. Parties shall bear their own costs.